Fair Trade- Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainabilityrade is an organized social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability.
Fair Trade includes:
Direct purchasing from those who are poorly served by conventional markets, specifically small farmers and their co-operatives.
Agreed upon commodity floor prices that provide for a dignified livelihood.
A promise by importers to make affordable credit available to the farmer co-operatives.
A worldwide network of non-profit certifying organizations.
A fee paid by the importers and wholesalers to cover the cost of certification.
A seal that assures consumers that a product was fairly traded.
As the volume and value of Fairtrade sales grows across the world there is an increasing need
to measure and demonstrate the impact of Fairtrade on farmers and workers, their families as
well as the wider community. It is crucial for the Fairtrade system to know to what extent these
objectives are being achieved.
Issues with Fair Trade
Like any system, there are some criticisms and issues with fair trade.
Producer certification fees
Producers (coops, associations, unions, etc) have to pay a Euro 2000 fee for initial fair trade certification and then a Euro 500 fee, every year to keep certification. Given that most producers in the developing world are small and poor and often even do not have enough money to feed themselves properly, the fees are extremely excessive and takes hard earned, much needed money away from the producers to pay for certification. The current system also precludes small family farmers and producers who cannot form cooperatives or associations for various reasons and hence cannot be certified as Fair Trade. No Importer Certification Differentiation
TransFair has certified Starbuck's, Green Mountain, Proctor & Gamble as fair trade importers, though they only import a very small percentage of their coffee as fair trade and the amount they import and the prices paid are not public information. This serves as "green/social washing" by big corporations, who can claim that they are fair traders, while importing only a fraction of their total products as fair trade and unfairly disadvantages the small importers, many of whom, import 100% of their products as fair trade. Both 100% importers and 1% importers are deemed as fair trade importers. As a result many small importers have pulled out of the TransFair certification process and chosen to make all their contracts, purchases totally public information. One Fair Trade Price Fits All
FLO mandated fair trade pricing does not take into account for the most part the wage and living disparities which may exist in different parts of the world, or even in countries which are in the same geographical region. The fair trade pricing set by FLO, therefore could be too low for certain producers and farmers and not enough to meet their basic needs. Lack of Transparency
Lack of transparency applies more to goods which are being sold as "fairly traded", but where the producers have not been certified as "fair trade" producers. Handicrafts, clothing, paper and many other items are currently being sold as "fair trade", but the businesses importing and selling them have almost no transparency as to what they are paying to the producer for a particular item. For fair trade certified products, the prices are set by FLO, but for others goods, there is no set price and hence it is easy for businesses to claim that they are "fair trade".
Environmental Benefits
Fair Trade certification guarantees that farmers use eco-friendly practices. The result is responsibly grown products that are healthy for you, for farmers and for the world we live in
Fair Trade includes:
As the volume and value of Fairtrade sales grows across the world there is an increasing need
to measure and demonstrate the impact of Fairtrade on farmers and workers, their families as
well as the wider community. It is crucial for the Fairtrade system to know to what extent these
objectives are being achieved.
Issues with Fair Trade
Like any system, there are some criticisms and issues with fair trade.
Producer certification fees
Producers (coops, associations, unions, etc) have to pay a Euro 2000 fee for initial fair trade certification and then a Euro 500 fee, every year to keep certification. Given that most producers in the developing world are small and poor and often even do not have enough money to feed themselves properly, the fees are extremely excessive and takes hard earned, much needed money away from the producers to pay for certification. The current system also precludes small family farmers and producers who cannot form cooperatives or associations for various reasons and hence cannot be certified as Fair Trade.
No Importer Certification Differentiation
TransFair has certified Starbuck's, Green Mountain, Proctor & Gamble as fair trade importers, though they only import a very small percentage of their coffee as fair trade and the amount they import and the prices paid are not public information. This serves as "green/social washing" by big corporations, who can claim that they are fair traders, while importing only a fraction of their total products as fair trade and unfairly disadvantages the small importers, many of whom, import 100% of their products as fair trade. Both 100% importers and 1% importers are deemed as fair trade importers. As a result many small importers have pulled out of the TransFair certification process and chosen to make all their contracts, purchases totally public information.
One Fair Trade Price Fits All
FLO mandated fair trade pricing does not take into account for the most part the wage and living disparities which may exist in different parts of the world, or even in countries which are in the same geographical region. The fair trade pricing set by FLO, therefore could be too low for certain producers and farmers and not enough to meet their basic needs.
Lack of Transparency
Lack of transparency applies more to goods which are being sold as "fairly traded", but where the producers have not been certified as "fair trade" producers. Handicrafts, clothing, paper and many other items are currently being sold as "fair trade", but the businesses importing and selling them have almost no transparency as to what they are paying to the producer for a particular item. For fair trade certified products, the prices are set by FLO, but for others goods, there is no set price and hence it is easy for businesses to claim that they are "fair trade".
Environmental Benefits
Fair Trade certification guarantees that farmers use eco-friendly practices. The result is responsibly grown products that are healthy for you, for farmers and for the world we live in